To think that a lot of us will be in trouble when we retire...

[Fleetheart]

This generation seems very unlike the previous ones in that we take out loans for everything, buy holidays on credit, kitchens on credit, new clothes etc etc. And pension schemes are getting less and less generous. And most of us don’t understand them anyway. I’ve always earned well, but have split up from partner, so still have s lot on my mortgage, no savings, and really not very much in my random pension schemes most of which are money purchase schemes and won’t pay a lot. And I know many people of my age (mid 50s) who have no pension at all. And meanwhile the govt is being less and less generous. What will become of us all?

thevandels
It was easy to register. I'm not sure why you had problems.

This is why i’ll Never leave the public sector. I have 11.5 years of civil service and NHS so far (i’m 36) so by retirement it should be reasonably healthy. My husband recently transferred to the MOD and his jaw dropped when he saw the pension, he was so pleased. Previously at his old private company it was 1% matched by the employer. I just pray that the state one never goes means tested.

I don't have a pension. When I get to pension age I plan on taking up illegal drugs, alcohol and cigarettes as my hobbies. Stuff knitting and gardening. That should solve the problem of living longer than I can afford.

@KisstheTeapot14 I literally can’t believe this about you dropping out of your pension scheme on ‘ethical grounds’ I hope that Tesco take ethics as payment once you’ve retired or you’ll be pretty hungry 😂 One of the most ridiculous things I’ve ever read on Mumsnet.

Present company excepted, HotChocolate, but one of the problems the public sector faces is that dead wood won’t leave because the pension is so good! They cling on for grim death.

I disagree with other posters who suggest that property is the best pension. The problem you have is this: a house will provide you with a revenue stream, in the form of rent, but houses are an all or nothing investment.

By which I mean, you can sell a block of shares from your SIPP or ISA if you want to raise some cash in a particular year - which is what I’m planning on when I retire, if I want a new kitchen or whatever, to supplement the revenue those assets are already producing, since I have no intention of buying an annuity - but with a house, you can’t just sell the dining room and one of the bedrooms, can you? It’s a less flexible asset, and one that takes more upkeep and hassle than a pool of equities and bonds. I certainly don’t want to have to deal with an agent telling me that the boiler in my rented house has broken when I’m 83. I rent out a house now, but I’ll be selling it long before I’m too old to take care of it.

katewhinesalot can I ask how you did It? I don't have a government gateway id, I tried Barclays but they wouldn't so I scanned my passport with the other online verification provider , can't remember their name and they said they couldn't verify me😣 just seems like a right arse.

@HotChocolateLover same, I've just moved from LGPS-private-civil service, the differences are eye watering, even from LGPS to CS. It would have to be a very big career opportunity for me to decide to leave the civil service now, though I'm only 30s so wouldn't want to define my career by the pension I would get, but I should have quite good prospects to stay in it and progress with my line of work. DH is military so he's sitting on a pretty pension too, but wants to go self employed when he comes out using his pay out, so we might look into a second property as I feel a bit vulnerable with him not paying into a pension, or a crap one (he'll only have a half military pension, he doesn't want to stay in beyond 12 years and I agree we can't live our lives for our retirement!)

@Iamthewombat
I agree with all your posts. Very much the voice of reason.
In regards to having a home (or three) as assets in retirement, there is such a thing as a reverse mortgage. (I would not advise it, but it exists). Essentially, the bank pays you a monthly payment until your equity hits zero and then they take possession. They calculate it based on the value of the equity you have and the number of years you want money. The downside is you are still the owner and have to cover all taxes, repairs, maintenance and so on. The bank also benefits from any property value appreciation.
It’s actually much better to sell the property and put the proceeds in an income bearing investment account. But hey, the reverse mortgage exists and is legal and sucks in a lot of elderly who live in a paid off home but find that state pension willing not fix their leaky roof.or replace their dead car..so they do a reverse mortgage to get extra income. If I were in Gov, I’d outlaw them like PPI

I don’t understand why some people are saying that local government and civil service are so good compared to private ones? Very few people are on final salary in the public sector, only the ones already very close to retirement. Final salary pension schemes in the public sector were phased out years back as far as I’m aware.

can someone please explain. I genuinely don’t know much about private sector havjfn worked in the public sector all my life so maybe don’t realise how good I’ve got it? My projected pension at retirement age seems very small but maybe I’ve got it good and don’t realise?

I thought the salaries in the private sector tended to be quite a lot more than their equivalent in the public sector? There are a lot of people struggling on low salaries in the public sector having had years of no or extremely low pay rises. No chance of bonuses either like some in the private sector. Even if contributions are at higher percentages in the public sector, a slightly higher percentage of fuck all is still fuck all. Presumably if people in the private sector are on higher salaries then even a slightly lower contribution may get the same outcome ultimately? Even if not, presumably that higher salary would enable them to pay additional contributions or into a SIPP from what would otherwise be disposable income?

are people talking about big differences in their projected annual pension at retirement age?

Sorry, I should have clarified, I’m in the local government pension scheme

@CurlyhairedAssassin ok so I am generalising private sector, I'm sure there are some good ones some where.

I had a Scottish widows one in my third sector job (private) and I paid in 6%, employer matched up to 6% tops.

When I was LGPS I paid about 5% and they topped up by about 14%

Now I'm civil service it equates to me paying about 6% and them paying about 26%, that's a HUGE bump in salary!

My DH doesn't even have to pay contributions into his military pension.

So no they are not as good as they used to be, final salary pensions are rare these days, but career average schemes like the CS are still hugely better on what the vast majority of people in private sector get, remember the private sector changed many of their pensions for the worse too. And government ones are more secure.

I was having a discussion with my son (who's 25 and single). He can't afford to buy a house (he's an accountant!) on his own. We were discussing how elderly people who've been in private rented accommodation for most of their lives will manage, and we were both wondering why they don't build more 1 bed houses for this eventuality. My son is at the other end but would like to live alone (he currently house shares) and have the chance to buy, I will only be able to afford rent on the most basic of accommodation.

But where we live, there just isn't any. Not even 1 bed flats. It's all estates full of 'family houses' which they know they can sell at massively high prices.

So where is everyone at the top and bottom end of the age groups going to go?

Thevandal
I can't remember as I first did it a few years ago but I don't think it was anything more complicated than typing in my national insurance number. Perhaps they've tightened things up now.

I think there will be more people sharing houses when they get older

I know everyone is saying they will work until they drop - but where? Once you are over 50 it’s harder and harder to find a job - you may be unemployed 10 years before the official retirement age - what are the non savers going to do then?

The public sector pension schemes where they are paying in say 26% does not mean that your employers are actually paying that into your pension. You need to look at your estimated pension to compare ewith private ones.
Public sector employer contributions are so high because for years employers underpaid. Some years local authorities paid little. When I was in a local authority pension scheme my local authority was putting in 2% then it rose to 3%, always less than I was putting in. That was far too low to meet their obligations, so now they have had to increase it a lot to make up for earlier underpayments.

@crankybitch I agree. I am in my 50's, was made redundant because my company closed down, and I found it really hard to get another job. I found it so easy 10 years ago to get another job, but suddenly now I am older it is tough. Try getting another job in your sixties. Unless you have very specialist rare knowledge then it is tough.

I started regular savings as salary sacrifice at work from my first temporary job after graduating from Uni and have done ever since.

I don’t think I have any pension from that 9 month stint, but I have 20 years accrued in my final salary pension scheme at work, so will certainly get 25% of my current salary- and have every expectation of staying another 19.5 years to get the remaining 25% I could get.

DH has also been saving and putting pension contributions in for over 25 years but his are more investment based and what annuity that buys at the end types - so realistically even though he’s the greater earned, I will be supporting our golden years 🤪 but we’ve known that for years.

Lots of people around us though have very little in pensions, even in mid40s, and expect to survive on the state pension. and also lots of debt (we only have DHs car on pcp and the last 5 months of the mortgage as debt, my car was bought with cash and we don’t get loans for general spending even renovations and holidays - they come from savings or we don’t do them).

@Kazzyhoward the PP didn't mean the decades 70s and 80s. The PP meant women who were aged in their 70s and 80s!

I’m in a workplace pension, I think I pay in about 3% and they pay 2% (was 1% until August). In the past I have worked for employers who contributed much more, but my last two employers have been 1%. Not a lot to keep the wolves from the door, especially as growth of the fund isn’t guaranteed.

@Kazzyhoward You misread my post. I said women in THEIR 70s and 80s, not THE 70s and 80s.

I don’t understand why people think they will be better off private renting than buying there own house? Monthly rental payments will go up, your mortgage payments go down over time as you pay the total off? Once the mortgage is paid off you have a safety net of a roof over your head for you and your children.

Im in the LGPS and the pension is keeping me there at the moment. At retirement I'm projected to get 39k a year if I continue paying in. It would be very hard to match that pension in the private sector.

Buying up properties as a pension just exasperates the problem. It means less affordable properties for young folk who are then stuck renting.

There should be more clamour for good pensions and secure housing but recent history shows people are happy to vote away council properties and workers rights. They then scratch their heads and wonder how things got so bad.

Good pensions should not be a "blip" in history, not in a rich country. The disaster of no deal Brexit should at least focus a few minds.

In honesty I would rather we didn't try to prolong life in the very elderly so much, and instead shifted health and social resources towards people's youth. Obviously continue to look after elderly people, keep them comfortable and out of pain and treat illnesses when appropriate, I'm not advocating neglect. But when someone very elderly with limited quality of life, dementia and in a nursing home gets pneumonia, or has a heart attack or stroke, I personally think that may be the best time to say goodbye and focus on palliative care rather than curative. If I was that elderly person, I'd rather more public money had been put into my education, healthcare when I was younger, support to help me raise my kids, rather than being spent on keeping me alive in a nursing home an extra 5-10 years.

You don't have to buy an annuity at all if you don't want to. It is helpful to look at pensions as a tax efficient way of saving because it is topped up as well. I intend to use my lump sum as money to draw down frpm to top up my pension when i need to . And I think I am right in saying the first few thousand a year works out tax free so I just see it as a nest egg not a vehicle to provide a regular income.
Personally seeing what an annuity will provide makes for v depressing reading with a private pension.